Cyprus is introducing its first foreign direct investment screening mechanism from 2 April 2026, giving authorities new powers to approve, prohibit or reverse investments on national security and public order grounds.
Finance Minister Makis Keravnos described the cabinet’s approval of the implementing legislation as “a very important decision because it has direct relation to safeguarding national interests.” He said the measure reflected “strong encouragement from the European Commission for Cyprus to introduce this institution that exists in all European Union member countries, precisely for safeguarding national interests.”
The law designates the Ministry of Finance as the competent authority, with powers to approve, impose conditions on, prohibit or reverse investments. An advisory committee comprising representatives from the ministries of Finance, Defence, Commerce and Energy, Foreign Affairs, Interior, Justice and Public Order, and Transport and Communications will support the review process.
The regime targets investors from outside the EU, EEA and Switzerland — including EU-based entities ultimately controlled by third-country investors holding 25% or above. Keravnos said foreign direct investment “is considered any investment by a foreign investor aiming at stable participation and substantial influence in the management of an enterprise of strategic importance in the Republic of Cyprus.” Strategic sectors covered include energy, tourism, transport, health, communications, defence, financial services and dual-use technologies, as well as land and real estate.
Notification and pre-approval are required for investments of at least €2 million resulting in the acquisition of at least a 25% stake in a strategic entity. Subsequent investments increasing existing stakes to 25% or 50% also require filing regardless of value. Non-notified deals remain vulnerable to call-in review for up to five years after closing. Exemptions apply to ships under construction or subject to purchase and sale, excluding floating storage and regasification units for natural gas.
Keravnos noted that screening previously took place informally through the Finance Ministry, the Securities and Exchange Commission and the Central Bank. “With this proposal now this procedure is specified with specific competencies and specific bodies, which will be able to impose and monitor this procedure,” he said.
The legislation completed a lengthy parliamentary process before cabinet approval. The bill was submitted to the House Finance Committee on 10 July and examined from early September, with the committee concluding its review with broad cross-party consensus despite initial disagreements. Committee chairwoman Christiana Erotokritou, a DIKO MP, said the framework gave Cyprus “a modern tool combining investment attraction with security.” “The Cypriot economy remains outward-looking and pursues the attraction of foreign investments, but with rules to protect the public interest and the country’s security,” she said.
Cyprus was one of only two EU member states — alongside Croatia — that had not introduced national FDI screening legislation before the law was passed. Greece enacted its own regime in May 2025, and the European Commission has proposed making screening mandatory across the bloc.
From 2 April 2026, foreign direct investments falling within the scope of the law must be notified to the Ministry of Finance for screening before completion. The Ministry is calling on investors and economic operators to familiarise themselves with the law’s provisions and ensure compliance.
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